Managerial Accounting Assignments
Discussion Forum
In the discussion forum you are expected to participate often and engage in deep levels of discourse. Please post your initial response by Sunday evening and continue to participate throughout the unit. You are required to post an initial response to the question/issue presented in the Forum and then respond to at least 3 of your classmates' initial posts. You should also respond to anyone who has responded to you.
Refer to the manufacturing company you selected for the Unit 2 Discussion and explain how you would determine the company's contribution margin and contribution margin percent. In your initial post include the following:
· Identify which specific variables should be included in the calculation.
· Illustrate your explanation by calculating the contribution margin and contribution margin percent using hypothetical values.
· Explain what your calculated results tell you about the company's sales and cost structure.
Written Assignment
Write a paper which is 3-4 pages in length, exclusive of the reference page.
In this paper, discuss the following case study. In doing so, explain your approach to the problem, support your approach with references, and execute your approach. Provide an answer to the case study's question with a recommendation.
You are the owner of a parasailing company that is expanding operations to a new beachfront location, and you need to prepare a three-year analysis for the bank that may loan you the funds to purchase your boat and parasailing equipment. Because of your well-established reputation, you already have received requests for "flights" to be scheduled as soon as you open the new location. Therefore, you expect to break-even the first year but must calculate the number of flights needed. You also need to determine the new break-even point in Year 2 if the location allows referrals, which you believe will average about 2% of the sales price overall. Finally, you need to determine the volume needed to have $10,000 in profit in Year 3. The following information is available:
· Sales price per flight $175
· Estimated loan payment per month $350
· Fuel costs per flight $100
· Full-time scheduler salary $2,500 per month
· Boat crew per flight $30
· $500 per month dock fee and use of a small office on the pier
Requirements:
· Calculate the Year 1 break-even quantity, contribution margin, and contribution margin ratio. Explain how the values were determined.
· Calculate the Year 2 break-even quantity, break-even sales, and contribution margin ratio. Explain how the values were determined.
· Determine the number of flights (units) needed to retain a profit of $10,000 in Year 3, assuming the company does allow for referrals.
· Recommend if the bank should issue the loan.
Superior papers will:
· Perform all calculations correctly.
· Articulate the approach to solving the problem.
· Explain the relationship of the costs to the concept of contribution margin.
· Discuss any limitations of the data, including what may be missing.
· Conclude on whether the bank should issue the loan.
Format your assignment according to the following formatting requirements:
1. The answer should be typed, double spaced, using Times New Roman font (size 12), with one-inch margins on all sides.
2. The response also includes a cover page containing the title of the assignment, the student's name, the course title, and the date. The cover page is not included in the required page length.
3. Also include a reference page. The Citations and references should follow APA format. The reference page is not included in the required page length.